A Q&A with Marisha Charbonnet, Attorney at Law
Creating a will or trust is essential to protect your loved ones, avoid probate and preserve family harmony. Failing to plan is planning to fail-and the stakes are even higher in blended families where remarriage can result in family conflict and the unintentional disinheritance of a loved one.
Question: When I die, my kids will receive my half of the assets . . . right?
Answer: Not necessarily. How your assets get distributed after death will depend on a number of factors such as 1) how title is held i.e. community property, separate property or joint tenancy 2) whether you have created a will or trust and 3) whether you have designated someone as a beneficiary.
Consider the following hypothetical: husband with 2 kids from a prior marriage gets remarried for the third time. Husband dies without a will or trust and at the time of his death owns a house in joint tenancy with his wife, has a joint checking and savings account with his wife and has a life insurance policy that names the wife as the primary beneficiary and his children as the contingent beneficiaries. In this scenario, the wife will receive ALL of the assets and the kids would get NOTHING. At that point, the only way the kids would receive anything is if their step-mother chose to explicitly designate them as beneficiaries of her estate after she died. This outcome could be dramatically different if the husband had created a will or trust and held title to his homes and bank accounts in a way that allowed him to leave his half to his kids.
Question: Can I protect my children from disinheritance by a step-parent if I die first?
Answer: I’m frequently asked, “If I die first, can my wife leave everything to her kids resulting in my kids receiving nothing?” Sadly, that can happen. In fact, this can happen even if a person has created a will or trust since many basic trusts and “do-it-yourself” estate planning options fail to address the nuances of blended families. If a person has a will or trust that leaves everything to the surviving spouse, that spouse can decide to leave everything to his or her own children or even to a new spouse!
This can still occur even if the couple had jointly agreed that everything would be divided equally between all of their children. Fortunately, that outcome can be avoided with some simple planning, as trusts can be structured in a way to provide for your surviving spouse while assuring your kids will receive an inheritance.
To learn more about estate planning, check out the free online educational seminars hosted throughout the year by various estate planning attorneys.
Marisha Charbonnet is the wife of an LAFD member and an estate planning attorney at Family Security Law Group, www.familysecuritylawgroup.com in Thousand Oaks, CA.